US ethane will remain volatile in short-term – LyondellBasell

28 October 2011 19:54  [Source: ICIS news]

HOUSTON (ICIS)--US ethane prices will continue to be volatile in the short-term, the chief executive of Netherlands-based LyondellBasell said on Friday.

“Some of that is due to logistics constraints, and some of it is due to the need for prompt barrels,” Jim Gallogly told investors during the company’s third-quarter earnings call.

“People have also been cracking much lighter [feedstocks] because that's where the margin is right now. That puts additional pressure on things.”

Gallogly said he is not sure when ethane prices will come down.

“When a price moves multiple cents in a day, you know there’s some unusual market conditions going on, and that has been occurring,” he said.

“I would expect prices to moderate some … as propylene prices come up and its co-products become more valuable,” he added.

Gallogly said the logistical issues should ease next year, when more pipelines are installed.

“We are putting in some additional pipes ourselves … to source some of our Houston crackers,” he said. “You also see some seasonal issues. People are shipping propane and butane on the same lines ethane moves.”

Ethane prices ended Thursday at 93.2593.75 cents/gal.

For more on LyondellBasell visit ICIS company intelligence 

By: Bobbie Clark
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